This is an interesting company. If you cast your mind back to 2012, Panmure Gordon did the IPO for this innovative company. I remember reading the admission document, and being intrigued by the concept - of converting standard shipping containers into portable hotel rooms, which could be used for events (e.g. Festivals, sporting events, etc), as well as semi-permanent overspill accommodation wherever needed.

I also recall reading that the original CEO was being sued by the Administrator of a company that he had previously been a Director of, and thinking to myself that that rarely happens, and is usually a very bad sign indeed. So with that in the back of my mind, once things started to go wrong, I exited quickly, and avoided the big fall in price once it became apparent that the original business plan just wasn't working.

It's been a big can of worms since, with original management leaving under a cloud, allegations of impropriety again swirling around the (now deceased) former CEO, and multiple fundraisings. So it all sounds pretty grim. However, as investors we should note the past, but mainly look to the future, so when I recently spoke to new management at Snoozebox I was impressed with how they have completely re-worked the business. So I took part in the latest Placing at 10p, which is announced this morning.

It hasn't gone down too well so far, with the share price dipping below the Placing price this morning. That's probably because the 2013 results, also announced this morning, are attrocious. However, as we all know investing is all about looking forwards. I've drilled into the business plan, and the Version 2 Snoozebox units, which are being ordered using the Placing proceeds, are a whole different proposition. They are a radically better business concept - instead of taking an army of people amp; equipment 3 days to erect, and another 3 days to dismantle (as did the Version 1), a V2 Snoozebox portable hotel can now be set up in one day, at low cost.

Also the demand has been very strong - see the trading statement from 20 Feb 2014 which generated the interest to enable this Placing to succeed. There are a lot of positives in there, regarding much higher selling prices being achieved, and once that is combined with the much lower set up costs from 2015 with the V2s, this should become a viable business in my opinion. In my view it should stack up as a viable business from 2015 with the v2 units.

It's obviously still highly speculative, so comes with a huge flashing wealth warning sign! However, if you are prepared to focus on what new management are doing, and write off the past, then it's in with a decent chance of developing into a good business I think. Time will tel!

Edit: A couple of other points on Snoozebox. Investors in the Placing will also receive a Warrant to subscribe for additional shares at 10p, with an expiry date of 15 Dec 2014. The purpose of this is to set up a second Placing of another £11m in advance, to finance a doubling-up of the v2 hotel rooms. Each Placing of £10-11m will finance about 250 of the new v2 rooms. Therefore the company and its advisers have a very strong incentive to keep positive newsflow going throughout 2014, in order to persuade warrant holders to exercise them.

So whilst you can buy in the market right now at about 10p per share, you just get one share. Whereas if you buy in the Placing, you get one share and one warrant. Therefore it's still possibly worthwhile taking up the £1m additional Placing shares (book closing at 5pm today), on top of £ 10 m firm Placing shares.

People ask me how you get into Placings? It's tricky, but is basically down to building a relationship with good brokers, and qualifying as a professional and/or high net worth investor. Also understanding amp; strictly adhering to the rules on insider dealing, not disclosing any inside information to any third parties, etc, are vital. Furthermore, being able to make decisions quickly and not be too demanding in terms of information, etc, definitely helps. Deep pockets are the biggest qualifying factor though, for obvious reasons!

Incidentally, I note that the expenses of the issue are £600k, which looks exorbitant for a £10-11m fundraising. Thankfully, I hold shares in Panmure Gordon, so should hopefully receive an indirect benefit from their getting away this fundraising and earning a fat fee from it!

This is a software company for the banking sector. They are in a sweet spot at the moment due to EU regulatory pressures, requiring banks to spend on improving their risk management software. So it looks superficially interesting. However, when I did more digging into the numbers, and a company visit last year, it became clear that the reported EBITDA was virtually all coming from capitalising a load ot their payroll into intangible assets (development spend). Once you look at cashflow, it doesn't really make anything much at all in the way of cash profits.

Therefore I am taking today's trading statement with a pinch of salt, when it says;

...it expects trading for the year ended 31 March 2014 to be in line with current market forecasts. Revenues are expected to be slightly ahead of market expectations with strong contributions from the Company's UK regulatory and risk businesses.

It's all very well massaging out a positive EBITDA number, but if that is then all spent on capitalised development costs, then there's nothing left to pay divis! Sure enough, the divis here have historically only been a token amount, with the forecast and historic dividend yield under 1%.

Cash is king. So I am always suspicious of companies which report great profits, yet don't generate any cash. The lack of a decent dividend yield can often be a very good indicator in my view, which is why I usually favour companies that pay out a decent divi. It's a great discipline on management too, to ensure they keep focussed on what they are actually there to do - i.e. create shareholder value, and divis are a big component of that in my view.

Results are starting to come through for some of the many new companies on the market, from the recent boom in IPOs. This one looks... hmmm, interesting! It has reported £8.5m turnover for calendar 2013 and, wait for it... a loss of £19.3m!

There was £12.7m cash at 31 Dec 2013, so one imagines it will need to raise more cash pretty soon, if the cash burn is still rampaging at a similar rate to 2013? I don't know what their business model is, something to do with video, but they've obviously told a good story to get the IPO away. Whether follow-on funding will be quite so easy to secure, in a distinctly more sceptical market that has developed in recent weeks, I'm not so sure.

Other than that, it's quiet for news today, people winding down for Easter I suppose.

See you as usual tomorrow morning.

Regards, Paul.

(of the companies mentioned today, Paul has a long position in ZZZ, and no short positions)

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